3 Best REITs To Buy With Pandemic Tailwinds

Remember when real estate investment trusts (REITs) were highly correlated? That meant if REITs were going higher, then all REITs went higher.

It turns out, not all REITs are alike. And the best REITs to buy today are standouts in troubled times.

The same economic forces that drove apartments moved hotel REITs. If the economy was good, people rented nice apartments and travel. They shopped and went to movies in malls.

If it was good for the economy, it was good for almost all REITs.

The COVID-19 pandemic has changed that.

2020 is the year we found out that not all real estate is alike.

The shutdown to halt the virus's spread has destroyed some parts of the REIT industry while providing significant tailwinds to other subsectors.

Malls, as we know them, are dead.

Hotels will take a long time to recover, and many of them will not survive the journey.

Office usage, especially in big cities, will change as a result of work from home policies.

Bottom fishing in the sectors that have been hit the hardest by the pandemic is a high-risk game that is probably best avoided by most investors. As malls and hotels go into default, this will become a distressed debt game with very little, if anything, left for equity holders.

Instead, investors should focus on those sectors that have massive tailwinds from the pandemic.

This REIT Pays 6%

Plymouth Industrial REIT Inc. (NYSE: PLYM) is an industrial REIT that should see above-average long-term growth due to the remaking of the supply chain in the United States. Plymouth owns 130 industrial buildings with approximately 20.8 million square feet across 11 states.

It is not chasing the same industrial properties as its competitors. Plymouth is focusing on properties in secondary markets that can be acquired on more favorable terms. It wants to own properties where the tenants are in industries that can benefit from an improving U.S. economy and realignment of supply chains.

It is looking to buy both single- and multi-tenant properties in markets in the United States' industrial, distribution, and logistics corridors. The company prefers markets with a large pool of skilled blue-collar workers to meet the need for its logistics-oriented tenant base.

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Disclosure: None.

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